Italy offered its full backing to the economic sanctions against Iran announced by the US government, new Foreign Minister Giulio Terzi said on Tuesday, adding to international pressure against Tehran's nuclear program.

"Italy supports with full conviction the plan for economic sanctions announced by the US administration," a statement from the Foreign Ministry read. The statement followed a report from the International Atomic Energy Agency which presented evidence suggesting that Iran had worked on designing an atomic bomb.

The United States, worried by
Tehran's nuclear program, named Iran on Monday as an area of "primary
money laundering concern" in a step designed to dissuade non-US banks
from dealing with it.

It also blacklisted 11 entities suspected
of aiding its nuclear programs and expanded sanctions to target
companies that aid its oil and petrochemical industries.

Iran dismissed new sanctions as more a propaganda exercise than something that will hit the economy.

"Such
measures are condemned by our people and will have no impact and be in
vain," Iranian Foreign Ministry spokesman Ramin Mehmanparast told a news
conference Tuesday.

US President Barack Obama said Monday that
the United States had identified "the entire Iranian banking sector -
including the Central Bank of Iran - as a threat to governments or
financial institutions that do business with Iranian banks."

Obama said Washington would continue to look for ways to pressure Tehran over its nuclear program.

"As long as Iran continues down this dangerous path, the United States
will continue to find ways, both in concert with our partners and
through our own actions to isolate and increase the pressure upon the
Iranian regime," he said.

US
Secretary of State Hillary Clinton and Treasury Secretary Tim Geithner
made an official announcement on Monday afternoon detailing the series
of new sanctions against Tehran,
focusing on Iran’s money-raising activities.

Geithner declared
the Central Bank of Iran to be a “primary money laundering concern,” a
step short of official sanctions that would require the United States to
cut off access to any foreign institution that does business with the
bank. That more drastic step would have presented serious problems for
US business if states such as China and Russia fail, as they are
expected, to cut off ties with Tehran. The new category would simply
warn off foreign governments and companies from dealing with Iranian
institutions.

Clinton phoned Prime Minister Binyamin Netanyahu
Monday evening to brief him on the sanctions the US decided to level
against Iran.

The
United Kingdom started off the trans-Atlantic sanctions announcements
earlier Monday when the British government announced their decision to
terminate all dealings with the Central Bank of Iran, a decision that
covers all Iranian banks, branches and subsidiaries.

“This
measure will protect the UK financial sector from being unknowingly used
by Iranian banks for proliferation related transactions,” said George
Osborne, Britain’s treasury chief.

Iran’s nuclear activities “pose a significant risk to the national interests of the UK and countries across the region.”

Since
the November 8 publication of the IAEA’s report on Iran, the US has
been pushing for international cooperation in policing Tehran’s nuclear
production initiatives. Last week’s meeting of the nuclear watchdog
organization’s board of governors yielded a statement calling on Iran to
open itself to inspectors, but stopped short of major international
steps against Tehran’s march toward nuclear armament.

Iranian
representatives were conspicuously absent from a two-day meeting in
Vienna held to discuss nuclear non-proliferation in the Middle East. In
the shadow of the recent report slamming Iran’s nuclear aspirations, the
IAEA hosted representatives of a number of Middle Eastern states,
including Israel, for a discussion on creating a nuclear-weapon-free
zone in the area.

There are already nuclearweapon- free zones in South America, Africa, the south Pacific and parts of Asia.

In
addition to the nuclear faceoff and the terror plot targeting the Saudi
ambassador to Washington, it looked Monday that there was yet another
factor in Washington’s growing tensions with Iran.

The Washington Post
revealed Monday that Iran was suspected of having provided former
Libyan leader Muammar Gaddafi with hundreds of artillery shells filled
with “highly toxic mustard agent.” These shells, discovered in recent
sweeps of Libya by anti-Gaddafi forces, were beyond the purview of the
minimal amounts of chemical agents that the US knew that Gaddafi held.

The Washington Post
article quoted a senior US official as saying that the US “was pretty
sure” that the shells were custom- designed and produced in Iran for
Libya.

Washington is also concerned that more than a dozen
undercover agents working for the CIA who were caught in both Iran and
Lebanon will be or already have been executed, ABC News quoted US
officials as saying on Monday.

According to the report, the agents were paid informants, hired by the CIA to spy on Iran and Hezbollah in Lebanon.

“Many
risks lead to wins, but some result in occasional setbacks,” ABC quoted
an official as saying. The arrests occurred over the past six months,
he added.

The officials gave credit to Iran and Hezbollah for
uncovering the two espionage rings, but say sloppy CIA “tradecraft” was
also partly to blame for the discovery of the networks.

“We were lazy and the CIA is now flying blind against Hezbollah,” a former official was quoted as saying.